SGL Carbon to offer new shares to clear debt and fund investments

The company is one of the few to provide carbon fiber for use in the auto industry, and has decided to offer new shares to investors – worth around 267 million euros ($339 million).

The move to grow the cash purse is set to tackle rising debt and fund further investments, as the company counts as its biggest business the sale of graphite electrodes to the steel industry. The latter has been fighting overcapacity, reducing SGL’s sales and earnings from that segment. SGL Carbon SE counts among its largest shareholders the likes of BMW Group (SGL provides carbon for the i3 and i8), Volkswagen Group and BMW heiress Susanne Klatten.

“The future strategic alignment of SGL Group is based on the consistent restructuring or disposal of loss-making business activities, improving the profitability of our business operations and exploiting new market opportunities in growth fields,” said CEO Juergen Koehler.

SGL said in a statement that each investor is entitled to expand its purse with the new share issue, allowing each of them to buy seven new shares for every 25 they already have. The company’s value has declined around 40% this year to 1.23 billion euros and its outstanding debt is of 625 million euros, with a 135 million euro installment due in 2016.